You Know You Are In A Bubble When...

From Sebastien Galy of SocGen, a quick meditation on the current
state of world markets, and what seem to him as clear signs of a
bubble.

Why do bubbles accelerate when identified? The cost of not
participating is too high as performance falls vs peers or
benchmark. Timing the correction and its intensity is also
much harder than participating, while I am sure a bunch of
behavioral biases are at work (see James Montier books from GMO).
The mad dash higher in bitcoins from 100 with multiple warnings
of a bubble to 250 and back down is the most recent
example.

You know you are in a bubble when the G20
expresses concerns about the consequences of ultra loose policy
for too long. A Forbes
survey shows money managers to be at their most bullish over the
past 20 years. Gold coins are all the rage from India to Germany
(why?). CFTC positioning confirms this view of extended risk
taking (long commo and usd vs mainly jpy), while equity ETF flows
shows that the US has been the clear darling vs the rest of the
world and this for a while. In parlance discouraged by the
Economist Style Guide, we are on Hopium squared.